Who: Oxfam, Nike, independent labour union, The Freedom of Association Protocol
Where: Indonesia
Sector: Footwear
What: minimum living wage, social dialogue, labor union
When: 2013

One of the footwear factories in Indonesia is managed by a large Korean manufacturer and produces athletic footwear for Nike, the world’s largest sportswear brand. The factory worked with a union to gain a waiver from the government in relation to a recent increase in the regional minimum wage. When gained, such waivers allow employers to delay implementation of the legal minimum wage for a negotiated period of time, so that they are effectively always behind in paying any annual increase in legal minimum wage to the factory mployees.

The factory employees formed an independent union in 2012 and this union formally affiliated with KASBI (Indonesian Congress of Allied Unions) in 2013. The new union actively called on the factory to forego the waiver and comply with the new minimum wages. After this, the union experienced extreme forms of violence and intimidation. Employee representatives received beating and threats, some even got abducted. The issue was continuously raised by the union to Nike’s local representatives. Nike (even though denying such statement) was not responsive at the time and did not take the issue seriously. The union raised this issue at the meeting of the national committee of The Freedom of Association Protocol in May 2013, in addition to sending a written testimony to the Oxfam representatives attending. The Freedom of Association Protocol (the Protocol) is a multi-party agreement created by Indonesian unions, factory owners and global brand-owning companies, including Nike, Adidas, Puma and New Balance. The Protocol establishes specific standards for freedom of association in participating factories, as well as grievance resolution procedures for violations of those standards.

In response, Oxfam promptly contacted Nike’s compliance staff at the international headquarters and relayed an English translation of the testimony, calling for an immediate response. This time, Nike immediately responded by setting up an extensive investigation and ensuring a disciplinary action process to provide safe working conditions and security, as well as to improve the factory’s management and industrial relations.

These actions resulted in staff changes within the factory and a formal recognition of the independent workplace union. In addition, the factory agreed to pay the full legal minimum wage and eliminate waiver scheme. The Protocol facilitated negotiations and social dialogue among the actors. The follow-up audits in 2014, 2015 and 2016 confirmed that the factory workers do not feel a fear of violence and other forms of intimidation.


Connor, T., Delaney, A., & Rennie, S. (2016). The Freedom of Association Protocol A localised non-judicial grievance mechanism for workers’ rights in global supply chains (pp. 1-53). Corporate Accountability Research. 

Silaban, R. (2016). Draft research Social dialogue in Indonesia and its contribution to decent work. KSBSI Indonesia.